Hi All Can a private company employee start an NGO ? Is it legally allowed?
From India, Mumbai
Dinesh Divekar
Business Mentor, Consultant And Trainer
Senior Hr Consultant

Dear Gkasture,

While taking an employee on board, the companies issue the appointment letter. In the appointment letter, most of the companies add a clause that prohibits the employee from taking any additional employment. The employees are prohibited from working on their weekly offs or on national holidays too. This clause is included so that the employee attends the duties without any distraction. Single employment is expected to have undivided attention to primary employment.

However, in your case, the employee says that he would like to start an organisation where commercial interests are not involved. What exactly is the nature of the NGO, and why does he wish to be involved? What will be the level of his involvement? Will it impact his job in any way?

There is no labour law as such on taking additional employment. The conditions of secondary employment are purely framed by the companies.

Lastly, let us look at the involvement in non-commercial organisations by HR professionals. There are several organisations like NHRD, NIPM etc. that are exclusively managed by HR professionals. Of course, they work pro bono. In fact, to be on the board of such organisations is considered prestigious. Therefore, while declining his request, look at these HR organisations and take the call judiciously.


Dinesh Divekar

From India, Bangalore
Gkasture - the keywords to look/ consider for this case are - 'conflict of interest' or 'dilution of interest'. Please route the employee to your Compliance Team. The merits are not very clear in your case - so it cannot be decided on this public platform.

It is clearly written in one's employment contract - whether they can take up any commercial/ non-commercial activity outside of their normal course of duties.

It is a compliance matter.

Practical advice - If these activities does not interfere with your Organization's commercial or operational interests, then the employee can participate or take up any activity outside basis his interest.

If it does, then please issue a written communication to the employee to check with 'Compliance' team and they will decide about further actions.

If your Organization doesn't have a mature compliance model yet -then please request the employee to declare it officially on papers and the Senior Management can rule out any conflicts/ dilution of commercial interests taking best judgment.

As always, please do not confront an employee with hostility in such cases or ask him to stop right away - it is not professionally right. Please obtain correct facts first and proceed through the right channel only.

From India, Delhi
Thank you Dinesh Divekar Sir and P-Lekha-Jacobs for your response
From India, Mumbai

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